Question

for the fy 2018 dorchester company's balance sheet included the following current items:cash $33,000 accounts receivable $142000 inventories $98000 prepaid expenses $24000 accounts payable $82000 amd accuree expenses $61000 use this information to determine the current ratio.round and enter your answers to one decimal place

Answer 1

Answer:

Calculation of Current ratio for dorchester company for fy 2018 is as follows:

Current Ratio = Current Assets / Current Liabilities

= $ 297,000 / $ 143,000

= 2.1

Thus, Current ratio for dorchester company for fy 2018 is 2.1

Working note:

Current Assets is as follows:

Cash	$    33,000
Accounts receivables	$ 1,42,000
Inventories	$    98,000
Prepaid expenses	$    24,000
Current Assets	$2,97,000

Current Liabilities is as follows:

Accounts payable	$    82,000
Accrue expenses	$    61,000
Current Liabilities	$1,43,000

Answer is rounded off to nearest once decimal places as per question requirement